Your Year in ESG | May 16, 2025
Why EPC C Assets Are Now a Material Risk for Real Estate Portfolios
Regulatory momentum continues to rise across the UK’s built environment, the government’s proposed tightening of Minimum Energy Efficiency Standards (MEES) regulations, to require a minimum EPC rating of C by April 2027 and B by 2030, poses a significant risk to real estate portfolios that are not proactively planning for compliance. While proposals are still subject to formal confirmation, they are already influencing lender requirements, investment strategies, and long-term asset planning across the sector.
For real estate owners, managers, and funds, this creates a critical near-term challenge: identifying and mitigating MEES risk at scale, particularly across EPC D and C rated assets. These assets have traditionally been seen as ‘safe’ and that’s changing rapidly.
Why MEES risk matters now
- Lease-ability at risk: Non-compliant properties could become unlettable, reducing income and triggering early obsolescence.
- Asset value erosion: Inaction could result in significant capital devaluation particularly in institutional portfolios and high-profile locations.
- Cost pressure: Delaying retrofit decisions often leads to higher intervention costs as deadlines approach.
- Data and disclosure requirements: Investors are increasingly demanding clear, costed pathways to compliance under SFDR, CSRD, and GRESB reporting frameworks.
The challenge of scaling MEES compliance
While MEES targets are clear, the pathway to achieving them is more complex. Large and diverse portfolios need to answer questions such as:
- Which buildings are most at risk, and by when?
- What interventions will guarantee an uplift to a compliant EPC rating?
- How do I balance cost, carbon, payback and tenant impact?
- How can I consolidate data for ESG reporting and stakeholder disclosure?
These are the questions we help property firms answer, using building-specific modelling to turn EPC risk into actionable retrofit strategies. Through data automation and scenario simulation, arbnco enables real estate teams to make evidence-based decisions faster and with greater confidence.
Building a portfolio-wide compliance strategy
- Map MEES compliance pathways across thousands of assets
- Model guaranteed post-intervention EPC outcomes, costs, and payback periods
- Prioritise retrofit strategies based on cost-effectiveness, carbon impact and geographic considerations
- Seamlessly feed outputs into wider ESG and net-zero strategies
MEES compliance isn’t just another regulatory hurdle, it’s a strategic opportunity to make informed decisions, safeguard asset value, and strengthen ESG performance in a shifting policy landscape.
Further reading:
- UK Government MEES Guidance:
Domestic private rented property: minimum energy efficiency standard – landlord guidance - Better Buildings Partnership:
MEES consultation response - The Law Society:
Guidelines on green leases and MEES for commercial real estate in England and Wales - UKGBC:
Whole Life Carbon Roadmap
